21st CENTURY CURES GETS A LIFT FROM SCOTUS — Now that Congress is under no immediate pressure to act on Obamacare subsidies, the chances are much better that Energy and Commerce Committee Chairman Fred Upton gets the floor vote he wants on Cures right after the Fourth of July recess. It would have likely been impossible had the Supreme Court ruled against the administration in King v. Burwell and sent Republicans scrambling for a response that might temporarily sustain health insurance assistance for 6.4 million Americans.

… But an early July vote is far from assured given the tight calendar. Still, the same day SCOTUS upheld Obamacare’s subsidies, E&C filed its conference report on the Cures bill, the latest step in its march to the floor. The 1,000-plus page document includes the legislation, background and an explanation of the provisions. What it doesn’t include are the final offsets. Committee and industry sources tell Prescription PULSE that the Part D pay-for is gone. That was going to provide $5 billion from delaying reinsurance payments and pocketing their interest. Lobbyists say that several smaller line items, likely to include at least some money from the drug industry, will be substituted. The conference report: http://politico.pro/1GLw6oc

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… E&C has reached an agreement with the Appropriations Committee to make the $10 billion for NIH and $550 million for FDA mandatory money. But appropriators will be able to specify how that is spent within the categories laid out in the bill, committee sources said. The new mandatory spending would be fully offset but still rankles some conservatives because it is outside of the budget caps, which apply only to discretionary spending. “Bypassing the caps would be a problem for conservatives, and it would undermine the credibility of Republican leaders,” Dan Holler, communications director for Heritage Action, said in an email. Budget Chairman Tom Price had yet to sign off on the deal over concerns about the caps, according to a GOP appropriations aide. Price’s office declined to comment.

… And House leadership is on board. Speaker John Boehner tweeted his support, and the bill had 230 co-sponsors by late last week, making aides on both sides of the E&C aisle confident Cures will pass. “It’s not about whether we get to 218 anymore,” said a Democratic aide said. “It’s how high we can run up the score and the momentum and get the Senate to act.”

Good Monday to you and welcome to Prescription PULSE, where we note an upcoming birthday for the CDC. This week in 1946, the Communicable Disease Center debuted on a single floor of a building in Atlanta. An early challenge was to acquire the trucks, sprayers and shovels needed to fight mosquitoes. http://1.usa.gov/1RDX04d

INSIDE THE INTERNET OF THINGS: The next tech wave isn't just an economic battlefield — it's a revolution likely to touch every American personally. In its second deep-dive issue on the Internet of Things, The Agenda offers the first in-depth look at how government policy is confronting the networked future of our daily lives. Beyond one fledgling caucus, how is Washington grappling with this sweeping new force? The short answer: It's not. http://politi.co/1QYsoQ1

PHARMA PUSHING IPR CARVE-OUT IN HOUSE — The drug industry is circulating a sign-on letter to build support for exempting drugs from a streamlined patent challenge process, a key issue stalling the House’s Innovation Act. The bill passed the Judiciary Committee with strong bipartisan backing this month, but PhRMA and BIO said they would fight it after Chairman Bob Goodlatte rejected drug makers’ demand that patents for FDA-approved treatments be exempted from the inter partes review process. “We should address this issue, which is crucial to maintaining the substantial R&D investments needed to develop new treatments and cures for U.S. patients, before the bill comes to the House floor,” the letter tells House leadership. A companion bill in the Senate, the PATENT Act, doesn’t include the carve-out either, but key senators have pledged to continue working with the industry before that legislation advances to the floor for a vote. The letter: http://politico.pro/1REoRkQ

… Pfizer also sent a letter to Goodlatte last week urging him to not only make changes to the IPR process but to ensure that the legislation modifies the venue provision related to litigation. Pfizer wants assurance that patent owners won’t be prevented from bringing suits in the jurisdictions “that have developed a significant expertise in addressing such suits.” Without such modifications, pharma companies could be impeded from “fair and expeditious resolution of legal actions.” In its pitch, the company harkened all the way back to its success eradicating smallpox and mass-producing penicillin during World War II, “saving the lives of thousands of troops.” http://politico.pro/1REuI9W

… Is a July vote likely? Rep. Darrell Issa thinks so, our Pro Tech colleagues report. “Our expectation is that we’ll take it up between the Fourth of July and the August break, which is a relatively short window,” said Issa, who’s co-sponsoring the Innovation Act. He’s predicting an overwhelming vote, too. “I’m quite confident that if Chairman Goodlatte works out some additional small changes, we can only get more votes.”

PHARMA PATENT SETTLEMENTS JUST GOT TRICKIER — If there wasn’t enough drama with IPR and patent reform, one of the industry’s normal routes for settling patent suits just took a blow. The U.S. Court of Appeals for the 3 rd Circuit ruled Friday that brand and generic drug patent settlements that involve a non-cash transfer of value are subject to antitrust scrutiny per the Supreme Court’s 2012 decision in FTC v. Actavis. It’s a win for the FTC, which calls such agreements “pay-for-delay” and has been pushing to get a broad interpretation of the SCOTUS ruling. But it’s a downer for the pharmaceutical industry, which says it needs some form of leverage to avoid lengthy and costly patent fights. The PRO story: http://bit.ly/1QUpGeg

FDA: AMARIN SUIT ‘FRONTAL ASSAULT’ ON RX APPROVAL PROCESS — A decision in favor of Amarin’s free-speech case “could establish precedent that would return the country to the pre-1962 era when companies were not required to prove their drugs are safe and effective for their intended use,” FDA told the U.S. District Court for the Southern District of New York late last week. Amarin contends that regulations that prohibit it from speaking to doctors about off-label uses of its prescription fish-oil pill violate the First Amendment. But the company’s legal arguments “strike at the very heart of the new drug approval process,” FDA argues. The agency says its application of the Food, Drug, and Cosmetic Act to Amarin’s proposed communications do not violate the First Amendment and is necessary to protect the public health. FDA’s full takedown of the Amarin case: http://politico.pro/1e6G4qj

MAKING THOSE NIH APPROPRIATIONS DOLLARS REAL — GOP appropriators have been very good to NIH, at least in this first, symbolic phase of the exercise. The labor, health and education bill that just passed the Senate Appropriations Committee would boost agency funding by $2 billion for fiscal 2016 — “the biggest funding increase since 2003,” said Jon Retzlaff, government affairs director of the American Association for Cancer Research. Yet while the entire medical research community is “extremely excited” by the interest in both the Senate and House in boosting NIH funding, “there’s a big ‘but’,” Retzlaff said. “It doesn’t matter what these bills have in them right now. If we’re going to get there, it’s going to take a budget agreement.”

… The Senate bill overall is $3.6 billion lower than the current year’s funding, per the rules of the sequester, not to mention that it contains numerous veto-bait cuts to Obamacare and a host of other programs that Democrats will never support.

HOUSE FDA APPROPS MARKUP DELAYED — The House Appropriations Committee canceled a markup of the FDA bill on Thursday, and there’s not yet a rescheduled date. The Senate Appropriations subcommittee that handles FDA has no markup on the calendar either.

UNSOLICITED ADVICE ON DRUG LABELING RULE, COMPOUNDING — The House Appropriations subcommittee that oversees FDA funding took a handful of jabs at the agency’s work in its funding bill. Key highlights: The panel criticized FDA’s proposed rule allowing generics to update safety labels on their own as one that could confuse patients and doctors, and it urged the agency to adopt a final rule that mirrors a proposal put forth by both the branded and generic drug lobbies. That proposal would put more of the onus on FDA instead of individual companies to oversee and facilitate labeling updates.

… Lawmakers also took a swipe at FDA’s interpretation of the compounding measures in the 2013 Drug Quality and Security Act, suggesting it’s done so in a manner “inconsistent” with the legislation’s intent and “the agency’s own previous positions.” The subcommittee wants FDA to allow “office-use” compounding, meaning pharmacists can compound a drug prior to receipt of a patient-specific prescription, and to issue guidance to this point.

… Nate Brown, who served as an FDA policy advisor to the Senate HELP Committee when the law was drafted, told Prescription PULSE that the act was meant to draw this “bright line of demarcation between pharmacy practice and outsourcing.” Pharmacists compounding drugs with an individual patient prescription would be overseen by states, and FDA would oversee outsourcers compounding drugs without specific prescriptions. The distinction was meant to fix the oversight confusion that followed dozens of deaths from the contamination of products at a Massachusetts compounding pharmacy, said Brown, now a partner with Akin Gump. Read the committee’s directives to FDA at: http://bit.ly/1eG0F5I

DOJ SENDS WARNING WITH MEDICAL DEVICE CEO’S JAIL SENTENCE — The former president and CEO of a medical device company, Charlie Chi, was sentenced to two years in prison Friday for intentionally distributing a medical device after FDA rejected its marketing application. The Justice Department used the sentencing to put other execs on alert. “Today’s sentencing of OtisMed’s CEO ought to send a clear message to others in positions of authority within the medical device and pharmaceutical industries: The Department of Justice will vigorously prosecute not only corporations, but also the individuals at their helm who are responsible for endangering public health and safety in pursuit of profit,” said Benjamin Mizer, head of its Civil Division. Chi was also fined $75,000 and sentenced to one year of supervised release following his prison term. In December, his company agreed to pay more than $80 million to resolved related criminal and civil liability related to distributing adulterated medical devises. DOJ’s statement: http://1.usa.gov/1Lu5lb8. FDA’s release: http://politico.pro/1BI3pte

TPP TALKS HEADING INTO HOME STRETCH — The approval last week of fast-track trade authority for President Obama started the countdown to a final round of talks that could produce a Trans-Pacific Partnership agreement as soon as late July. Some tough negotiations remain on pharma issues, however, including monopoly protections for biologics. The POLITICO story: http://politi.co/1NkgOIH

HEPATITIS C DRUGS EXPLODING VA'S BUDGET — During a hearing on the VA's fiscal 2015 budget, Deputy Secretary Sloan Gibson said the new hepatitis C treatments will increase the department's drug costs by $1.1 billion this year — up from the $673 million estimated last September. California Rep. Mark Takano asked Gibson about what price the VA had been able to negotiate for therapies like Sovaldi, saying he understood the department "is paying closer to $600 a pill" instead of the $1,000 that manufacturer Gilead typically charges. Gibson hesitated and then begged off. "I would like to not have to answer that question," he said. "We work very closely and collaboratively with the manufacturers of those drugs and have been able to reach attractive arrangements for the continued purchase of those drugs. And we continue to have those conversations."

PHARMACIES WANT TRACK & TRACE DELAY, TOO — Three pharmacy organizations are asking FDA to delay enforcement of a July 1 deadline, which would require pharmacies to keep track of drug transaction information. The National Community Pharmacists Association, the American Pharmacists Association and the National Alliance of State Pharmacy Associations say FDA’s decision to delay enforcement of the product-tracing requirements for drug manufacturers and distributors by five months in turn shortened the implementation timetable for pharmacies to work with those entities on receiving and storing the data.

The Drug Supply Chain and Security Act “envisioned a staggered implementation schedule that would let manufactures and distributors refine their systems before drug dispensers were to have systems in place to receive and store transaction information,” the groups note. And despite extensive efforts by drug distributors to educate pharmacies, some trading partners “will encounter challenges beyond their control with the possible outcome of disruption in the supply chain.” The pharmacy group’s letter to FDA: http://bit.ly/1QUpGeg

REIMBURSEMENT UNCERTAINTY TOP PHARMA CONCERN — Third-party payer drug reimbursement is a worry for 96 of the 100 largest pharma companies on the NASDAQ Biotechnology Index — up from 85 companies in 2014. They cite concerns about reimbursement changes and drug coverage, including payments from Medicare and Medicaid, as risk factors in their most recent SEC 10-k filings, a new analysis finds. Other top risk factors mentioned: competition, consolidation and pressure on pricing; federal, state and local regulations; and FDA approval and compliance. For more see: http://bit.ly/1fH7KTT

CATCHING OUR ATTENTION: WHY LILLY DECIDED TO PUSH AHEAD WITH ALZHEIMER’S DRUG — Despite disappointing results in early trials, the CEO of Eli Lilly & Co. chose to keep going with development of an Alzheimer’s treatment candidate, solanezumab. BloombergBusiness does a deep dive on the decision and what’s at stake: http://bloom.bg/1LtSfuw